Lululemon Athletica (NASDAQ:LULU) Earnings Forecast Disappoint

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By Jacob Maslow

Lululemon Athletica Store Canada
The exterior of the Lululemon Athletica retail store on Queen Street West in Toronto. Lululemon is a worldwide athletic apparel company founded in Vancouver, BC.

Lululemon Athletica (NASDAQ:LULU) stocks are skyrocketing despite first-quarter earnings forecasted below analyst expectations.

The company’s stock has risen due to a strong fourth-quarter where the stock’s earnings per share (EPS) was $0.78 vs expectations of $0.73. Revenue for the fourth quarter rose 16% from $521 million to $602 million. Sales increased by 8%. The company’s stock rose nearly 7% on the news.

Lululemon also released their forecast earnings on Thursday, which were lower than expected. Investors were reassured that the forecast is lower due to West Coast port delays and the currency-related issues. Australia and Canada sales are expected to suffer due to a weaker currency. While Canadian, the company purchases its products in USD.

Stuart Haselden, CFO of Lululemon, states that a large portion of inventory has been delayed due to port issues. This inventory has been delayed for more than 3 weeks also causing sales to drop. Stuart also states that the company plans for 2015 to be an investment year with larger expenditures due to new product development and store openings.

EPS forecasts for the quarter are projected at $0.31 – $0.33, missing analyst expectations of $0.39. Revenue forecasts are also below analyst expectations of $442 million, with the company forecasting revenue of $413 – $418 million.

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